When the ethnicity of a character is important only as a racist caricature, I think it's actually *wise* to move away from that. I'm not a fan of Political Correctness at all, but there are definitely certain stereotypes that are way, way over the line, and comic-book Mandarin was one of them.

IM3 made a good case --- two of them, in fact --- for Mandarin not having to be Chinese at all. And Shane Black wasn't the first to come up with that notion, anyway. Hell, the animated version of Mandarin in the 1990s Iron Man toon wasn't even *human,* much less Chinese.

The only thing that is perhaps a 'racist caricature' about the comics Mandarin is his physical appearance from when he was first conceived.
That appearance can be changed without changing his race.

If we're talking about changing characters races to appeal to the modern audience and to level the playing field for actors and give those struggling minority actors a chance at getting good roles then I don't see how this particular example is not a bigger deal. Hero roles aren't the only coveted parts for actors. Villain roles can sometimes be more successful in launching someone's career to the next level. Look at what playing a serial killer did to Anthony Hopkins and Charlize Theron's careers.
Why wasn't an asian actor given the opportunity of playing a great character with so much history? Because it's "racist"? It only would've been racist if Mandarin had been written as a joke of a character.
Replace the part played by Pierce in IM3, exactly as it was written, with an Asian actor and then tell me that would've been racist.

__________________"A shared universe, like any fictional construct, hinges on suspension of disbelief. When continuity is tossed away, it tatters the construct. Undermines it."
-- Peter David